Introduction to Marketing Segmentation and Determination of Target Market

This document provides an introduction to marketing segmentation and explains how to determine the target market for a business. It discusses the benefits of segmenting the market and targeting specific customer groups. The case study focuses on Lush Company, a UK-based cosmetic retailer, and analyzes their market analysis, consumer buying behavior, and marketing segmentation strategy.

Marketing
Segmentation
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Table of Contents
PORTFOLIO 1.................................................................................................................................3
INTRODUCTION.......................................................................................................................3
PORTFOLIO 2.................................................................................................................................4
Analysis of the market and the stakeholders analysis..................................................................4
REFERENCES................................................................................................................................6
PORTFOLIO 3.................................................................................................................................7
Consumer buying behaviour and its benefit to the organisation..................................................7
REFERENCES................................................................................................................................8
PORTFOLIO 4.................................................................................................................................9
Introduction to marketing segmentation and determination of the target market of the client....9
REFERENCES..............................................................................................................................10
CONCLUSION..............................................................................................................................11
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PORTFOLIO 1
INTRODUCTION
Marketing segmentation is a process in which the market is to be divided into various
segments on the basis of the common characteristics which are possessed by the individual. With
the help of such strategies it becomes easier for the marketer to identify the specific target market
that they have to cater to. In this report the company that is taken is Lush Company which is a
UK based cosmetic retailer offering a wide variety of cosmetics. It has been founded in the year
1995 by Mark Constantine, Rowena Bird, Helen Ambrosen, Liz Weir, Mo Constantine, Paul
Greaves. It is one of those business organisation which performs business activity at a smaller
ground as it is a privately owned company. This report includes the analysis of the market which
help in identification of the opportunities and the threats in the market which might create
problem for the organisation like Lush Cosmetics. The consumer buying behaviour is also
considered. Apart for this, the strategy of marketing segmentation is analysed with can help them
to satisfy the customers by providing them goods and services as per their needs and wants
which will help the organisation like Lush to accomplish their target.
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PORTFOLIO 2
Analysis of the market and the stakeholders analysis
Marketing environment is related with various internal and external factors that has
influence on the business of the organisation. The factors of the marketing environment includes
various employees, customers, shareholders, political factors, technological etc. By analysing
such factors the Lush company can reduces its impact on time and can grab various opportunities
available in the market (Sharma and et. al., 2019).
For analysing the market environment need to be done which includes:
 PRESTCOM Analysis: It is one of the business analysis which simply explains that
how any of the business organisation is required to perform on the basis of external
factors.
POLITICAL
The political stability in UK has advantage for
the company as the policies will not change in
short period which will have positive impact
on them but the custom duties and the trade
barriers affects the operations.
REGULATORY
The government in increasing various rules on
recycling of the products which is why they
have to comply with various such regulations
which affects their business while as they
provides guarantee to the consumers regarding
the quality of the products helps them to meet
up with various regulations.
ECONOMIC
The growth in the emerging market has the
opportunity for the Lush company as they can
easily expand their operations. But with the
rising inflation the prices of the cost of
material increases which affect the prices of
the final product and that can create problem
for Lush Cosmetics.
SOCIAL
With the increasing consciousness among the
consumers for the organic products the demand
of their product are expected to increase. Along
with this the acceptance of the man for the
caring products has positive impact as it can
boost up their demand.
TECHNOLOGICAL
The technology has major impact on every
business as it keep on changing frequently and
COMPETITIVE
It is the factor which simply explains that
company like Lush faces tough competition in
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the company has to comply with it such as the
investment need to be increased in online
sources of advertising which will help them to
attract more of customers. But this increase
cost for the company (Tuten and Solomon,
2017).
the market and it is necessary for them to
understand that company can only perform
better in the market if they are able to compete
with competition which is being given by
L'Oreal, Sephora and many more.
ORGANISATIONAL
It is one of the factor which has the connection
with internal factors as it was important for the
business organisation to understand that they
can only perform better within the market if
they give focus to gives rewards and incentives
to their employees. The management of Lush
cosmetics will have to focus on the their
employees that how they can be motivated in
any of the situation.
MARKET
If company like Lush is required to perform
better in future period of time then it will be
necessary for them to decide about the market
where they are willing to perform. Here, it will
be crucial for them to cover the maximum
percentage of market if they are willing to
perform at a bigger market for the purpose of
accomplishing the goals of an organisation.
 SWOT Analysis: For analysing the internal factors of the company the SWOT analysis
need to be done by the company which is given below:
STRENGTHS
The strength of the company is that the product
they offers are organic and less expensive with
the help of which they can easily attract the
customers. Along with this the product which
they provides is unique than their competitors
(Armstrong and et. al. , 2018).
WEAKNESSES
The weakness of the company is that the
consumers do not have brand awareness. Also
the product life cycle is long which can affect
the decision making of the consumer. Their
target market is lower – middle class due to
which they cannot tap a large section.
OPPORTUNITY
The opportunity which they have is of increase
in the demand as the industry is facing growth.
They have green awareness and creativity in
THREAT
the threat which Lush company has been
facing is that of the stiff competition from
various multiple and big brands. Along with
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their products which will help them to attract
more of the customers.
that they have a threat of brand loyalty due to.
 Stakeholders Analysis: With the help this the power and influence of various
stakeholders of the company are analysed.
Stakeholders Influence of the stakeholder
Consumers The consumers are the important stakeholders which has high powers to
influence the operations of the company as they have to operate as per their
interest (Kerin and Hartley, 2015).
Employees The employees of the company are important and have interest at the most
but they have least power to influence as they do not have any right to take
any decision.
Investors Investors are those stakeholders which help them company to procure funds
but due to this they can influence the decisions of Lush company. Also as
they have invested funds they have interest in the operation.
Society Society plays important role in the success of the company as they analyse
the impact on the environment and on these grounds they can influence their
operations.
REFERENCES
Books and Journals
Armstrong, G.M., and et. al. , 2018. Marketing: an introduction. Pearson UK.
Kerin, R. and Hartley, S., 2015. Marketing: the core. McGraw-Hill.
Sharma, V., and et. al., 2019. Trends in Ayurvedic FMCG Market. Journal of Young
Pharmacists, 11(2).
Tuten, T.L. and Solomon, M.R., 2017. Social media marketing. Sage.
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PORTFOLIO 3
Consumer buying behaviour and its benefit to the organisation
Consumer buying behaviour is related with various factors that affect the decision making of the
consumer. Such factors includes the attitude of the consumers, their perception, intention of
taking decisions etc. The analysis of such factors helps the organisations to determine the aspects
which they have to focus upon as they can affect their demand. With the help of this analysis the
Lush company can determine various strategy which they need to follow. The company target
the college going and office going people as they uses the cosmetic most .
The analysis of the consumer decision making includes the process which is given below:
 Problem Recognition: Firstly the need is to be recognised by the consumer which helps
them to identify the product that they have to purchase. In case of cosmetics such need
could be to look beautiful, anti ageing products, nourishment requirement etc.
 Information Search: On the basis of the need the product id identified and for this
adequate research need to be conducted by the consumers. It can be done by them
through internet and social media as the use of social media has increased a lot (Pathak
and Nichter, 2018).
 Evaluation of Alternatives: After gathering the information the consumer evaluate
various alternative which they have on the basis of the use and the prices etc.
 Purchase Decision: The one which is most valuable out of all the alternatives will be
selected by the consumers and for that product the decision making will be done by them
which is based on the perception of the people.
 Purchasing: The purchasing of the product will be done after the decision is made by
them to purchase a specific product out of all.
 Post-purchase Evaluation: Post-purchase evaluation need to be done by analysing the
level of satisfaction of the consumers which can be done by way of after sales
communication.
Influences on consumer buyer behaviour: The buying behaviour of the consumers can
be influenced by the marketer by way of various promotional campaigns, their perception etc. for
which the Lush company need to consider the factors that can influence the decision making of
the consumers:
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 Purchasing power : The purchasing power of the consumers affects the buying
behaviour of the consumers the most as they can buy any product only if they have the
capacity to buy such product.
 Marketing Campaigns : The advertisements by the marketers influences the consumers
decisions as the advertisements and the marketing campaigns helps the consumers to
understand the benefits of the products. This influences them to buy the one which is
most suitable to them.
 Personal Preferences : The family, friends of the individual has impact on the decision
making as they make them understand the impact. In addition to this the impact of the
perception is also strong on the buying behaviour as it makes them brand loyal .
Further various analysis which is to be made includes:
 Currently the products of the Lush Company are used by the college going people and the
office going people as they are more concerned about their appearance.
 The customers expect from the company that they must provide variants in their products
as their products are 100% vegetarian that contain fruits and vegetables extracts in their
products (Jaiswal and Gupta, 2015).
 The prices of the products of the Lush Company are economic which is why the
customers can easily pay such prices for all the products.
 For some of the cosmetics they have to approach to other providers such as for some
cosmetics products that includes specific products for man and children.
REFERENCES
Books and Journals
Jaiswal, A.K. and Gupta, S., 2015. The influence of marketing on consumption behavior at the
bottom of the pyramid. Journal of Consumer Marketing, 32(2), pp.113-124.
Pathak, G. and Nichter, M., 2018. Cleanups, confidence, and cosmetics: Marketing beauty in
India. Journal of Consumer Culture, p.1469540518818631.
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PORTFOLIO 4
Introduction to marketing segmentation and determination of the target market of the client
Marketing segmentation is a strategy which helps the company to divide the market
segment into different groups on the basis of common characteristics which are possessed by
them. Such strategy includes segmentation, targeting and positioning of the potential market.
Segmentation is dividing the total market on the basis of geographical factors, behavioural
factors, demographic factors etc. While out of all the segments one has to be targeted by the
company and for them various positioning strategies are to be adopted by them (Dietrich,
Rundle-Thiele and Kubacki, 2017).
This helps the marketer to determine the specific segment which they have to focus upon.
It make them efficient in using their resources by paying attention on specific target market.
With the help the Lush Company to reduce the cost of operations by focusing upon specific
market.
This strategy can make the marketing team of the Lush Company competent to deal with
the various situations. Also various analysis are done for the Lush company includes:
 Market/sales trend : The products of the Lush Company are preferred by the individual
as they are organic and includes various extracts of fruits and vegetables. The company
has approximately 5,69,000 customers who has been using the products of the company.
For this they spend approximately major portion of their total cosmetic expenditure on
their products (Christmas ‘make or break’ for Lush UK’s social ‘switch up’ strategy,
2019).
 Market Segments : They have been segmented their market segment on the basis of their
region and habitat . Along with this they have considered the age, lifestyle, perception of
the people. This help them to focus on specific aspects.
 Target Markets : They have been targeting the people with the help of various innovation
in their products and attracts the people through their quality as they do not include any
chemical in their products.
 Competitors : The major competitors includes The Body Shop as their products also
nature based and they provides goods for all i.e., man, women and babies. The offer
wide variety of cosmetic products at lower prices which makes their products affordable
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for all. Their USP is that they focusses upon aggressive marketing and promotion so that
their customers are well aware (Sharma and Bargal, 2018) .
 Positioning : They position their products in the market with the image of fresh
cosmetics which are made up of various natural ingredients. Also they made their
products which are 100% vegetarian. With the help of all this they can easily attract
customers.
REFERENCES
Books and Journals
Dietrich, T., Rundle-Thiele, S. and Kubacki, K., 2017. Segmentation in social marketing.
Springer Singapore:.
Sharma, A. and Bargal, H., 2018. Application of segmentation, target and positioning in tourism
marketing. TRANS Asian Journal of Marketing & Management Research
(TAJMMR), 7(9and10), pp.20-30.
Online
Christmas ‘make or break’ for Lush UK’s social ‘switch up’ strategy, 2019. [online] Available
through: <https://www.thedrum.com/news/2019/10/25/christmas-make-or-break-lush-
uk-s-social-switch-up-strategy>
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CONCLUSION
It is concluded from the above report that the company need to analyse the market
environment as with the help of such analysis they can identify the opportunities they can grab
and the the threats whose impact need to be minimised by them. Also it is important for the
company to understand the factors which influences the behaviour of the consumers so that they
can formulate efficient strategies to deal with them. For this they need to understand the target
market by dividing it into various segments. This strategies facilitates them to adopt the changes
in the taste and preferences effectively.
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